Bayer to licence its patented drug to Cipla

“Bayer has filed a patent infringement suit against Cipla, a drug company in Mumbai, India”

“Cipla makes an inexpensive version of Bayer’s Nexavar, a drug for liver and kidney cancer.”

MUMBAI, India — India’s government authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug, saying that Bayer charged a price that was unaffordable to most of the nation. Source: (As published in NY times on March 12, 2012)

This is the first time in India that compulsory licence of patent drug had been granted in India. This was the decision taken by the controller general of Patents, designs and trademarks.
This decision states that- “Bayer must license the drug Nexavar, or sorafenib, to Natco Pharma, an Indian company. In exchange, Natco must pay Bayer a 6 percent royalty on its net sales and must sell the drug for 8,800 rupees ($176) a month, about 3 percent of the 280,000 rupees ($5,600) that Bayer charges for it in India. Natco’s drug will be for use only in India.” (Source: NY times)
Nexavar is a drug which is developed by Onyx Pharmaceuticals, a California biotechnology company, is used to treat advanced kidney cancer and liver cancer.

India is a second company after Thailand to grant the compulsory licence to a cancer drug. India started granting patents for drugs in 2005. The provision states that a compulsory license may be granted if an invention is not available to the public at a “reasonably affordable price.”

CONCLUSION AND FINDINGS:

The reason for the decision was made public because Bayer supplied the drug to only 2% of the patient population, hence not fulfilling the reasonable requirements of the public.

“The Patents Act allows such CL applications after three years of the grant of patent, if reasonable requirements of the public with respect to the patented invention have not been satisfied; the patented invention is not available to the public at a reasonably affordable price or if the patented invention has not worked in Indian Territory.” (Source: Business Standard)
Ultimately, there is a consequence for this decision that warns, when drug companies are pricing high and limiting the availability, the patent office can and will end monopoly powers to ensure access to important medicines.